There is an old adage in sales: Ability x Motivation = Performance. When recruiting and training salespeople, businesses often pay closer attention to the ability factor. As a top-level manager or business owner, you must ensure that your salespeople are properly motivated and sales incentives are a great motivator.
Motivation is a tricky concept. Management science and psychology have begun rigorously investigating it only in the past half-century, and our overall picture of motivation is just beginning to take form. While science has not yet nailed down the precise nature of motivation, there are two things we do know for sure: It is a quality that exists in every human being, and it can be managed.
In sales, one of the most common ways to manage motivation is to use incentives. Here are some examples of popular sales incentive systems that can help you effectively boost your sales team's motivation:
Method: Cash bonus
Pro: Naturally enough, money is the best reward for most salespeople.
Con: Salespeople may see a cash bonus as part of an overall compensation package, not as a special sales incentive. Also, small businesses may lack the financial resources to make this system feasible.
Method: Merchandise
Pro: Sometimes people are more excited by a hot item than by the equivalent amount of money; consider the iPod or Wii.
Con: Finding the right item with which to crown a sales incentive campaign is tricky. You have to acquire an intimate knowledge of your sales force or else be flexible enough to offer a wide range of merchandise from which they can choose.
Method: Experience
Pro: Offering someone an experience - for example, an all-expenses paid vacation, a day at the spa, a plane trip, or a hot sports ticket - can create memories that last forever.
Con: As with merchandise, choosing the right experience demands a thorough knowledge of your salespeople. This type of incentive can also be expensive for you to underwrite.
Method: Recognition
Pro: Taking the time to recognize a leading performer with a plaque, cake or special lunch doesn't require much in terms of expense.
Con: Although everyone appreciates recognition, salespeople may expect more than this kind of gesture, no matter how thoughtful it is.
Method: Workplace perks
Pro: It's free. Giving top performers the right to work from home one day a week, their own office, the ability to take a class, regular time off for child care or any other kind of workplace flexibility costs nothing - but can be very valuable to employees. It can also motivate salespeople to look up to you for trusting them.
Con: None. Salespeople, like all employees, like to negotiate workplace privileges.
These motivational methods are not mutually exclusive; in fact, many successful organizations employ a mix of sales incentives. A few basics, however, do apply across the board when it comes to sales incentives systems:
- Simplicity: Do not make incentives cumbersome for the individual salesperson to understand or track. It is demotivating to have to puzzle over incentive systems, and salespeople will simply not bother to decipher complex rules.
- Publicity: Psychologically, a reward becomes more enticing when it is within reach. Publicize sales incentives in printed matter and conversations so that salespeople know not only that the incentives exist but also that they are attainable.
- Knowledge: If you want to get the best out of your employees, you have to know what makes them tick. This can be a con for sales incentive systems, particularly since small business owners may not have the time to dedicate to this aspect of human resources. If you have the time and inclination, however, learn as much as you can about personality-based theories of motivation, and figure out where your salespeople fit in.
- Professionalism: The existence of an incentive system isn't meant to replace day-to-day efforts to equip, support, and respect your sales force. Even flashy incentives won't make up for a poorly run business.
- The Big Picture: Remember that incentives programs aren't the end-all of sales management. Sales motivation is holistic, encompassing proper recruitment, training and direction as well as incentives. Motivation comes not simply from the lure of tangible rewards but from being treated well. Paying attention to the whole process is the best thing you can do for salespeople.
